What Is Trump’s Truth Social? What To Know About Lawsuits, IPO

truth social explainer

Unless you’re a die-hard fan of Donald Trump, a right-wing influencer, a Republican member of Congress, or the former president himself, you’ve probably haven’t spent much time in the digital wasteland that is Truth Social. 

Founded in 2022 as Trump’s personal social media platform, Truth Social was created as a MAGA alternative to X (then Twitter) following the former president’s ban from the platform in the aftermath of the Jan. 6 Capitol riot. 

Truth Social has seemed on the verge of financial collapse since it first launched. Its meager base of 5 million monthly active users operates largely as a hive around its queen bee: Trump. The former president uses the platform as his exclusive social media forum for stream-of-conscious rants, screeds against his political enemies, endorsement announcements, and sharing articles lauding his greatness.

Despite internal chaos, federal investigations, and the many legal and criminal issues faced by its majority stakeholders, Truth Social made its stock market debut late last month. It’s been a rocky few weeks since the IPO, with abysmal financial reports rocking investor confidence and Trump suing two of the platform’s co-founders.

Trump took to the platform on Thursday to try to put everyone’s mind at ease. “I THINK TRUTH IS AMAZING!” he wrote in a multi-post rant pumping up the platform. “First of all, it is very solid, having over $200,000,000 in CASH and ZERO DEBT. More importantly, it is the primary way I get the word out and, for better or worse, people want to hear what I have to say, perhaps, according to experts, more than anyone else in the World.”

To understand what the hell is going on with Truth Social, here’s a timeline of the platform’s dramatic, lawsuit-filled spiral. 

Jan. 8, 2021: Trump is banned from his favorite social media platform, Twitter.

May 2021: Trump unveils “From the Desk of Donald J. Trump,” a website to post his ramblings in a vaguely social media-ish format. The project survives less than a month before being shut down.  

Oct. 21, 2021: Trump announces the creation of the Trump Media & Technology Group (TMTG), and his plans to create a social media app to rival Twitter. Trump adds that the company has been created through a Special Purpose Acquisition Company (SPAC) merger with Digital World Acquisition Corp. (DWAC). An SPAC is a publicly traded, blank-check company that exists to fundraise for a merger with another company seeking to go public on the stock market. SPAC’s are restricted to a two-year period before they must either complete their planned merger or dissolve. 

Oct. 21, 2021: Hackers almost immediately find the unpublicized domain of Truth Social’s beta and start trolling the platform. 

Nov. 6, 2021: The New York Times reports that DWAC’s massive $300 million investment haul for the venture may have violated securities laws by fundraising off of its proposed merger with Truth Social before being officially listed on the stock market. Throughout the fall and winter of 2021, a slew of reporting emerges on the ethical questions surrounding Trump’s financial backers, and their histories of being investigated by the SEC. 

Dec. 6, 2021: A DWAC filing reveals that the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have begun probing the SPAC’s communications with TMTG, indicating that the two agencies could suspect improper financial dealings between the companies. 

Dec. 21, 2021: The Washington Post reports that Arc Capital, a Chinese investment firm involved in the creation of Digital World Acquisition Corp., has been the target of multiple investigations by federal securities regulators. The company allegedly misrepresented shell companies as thriving operations enterprises. 

Feb. 21, 2022: Truth Social goes live. 

March 30, 2022: After garnering more than 800,000 users in its first week, new user sign-ups drop to about 60,000 a month after its launch. Overall website traffic drops by 93 percent in the same period. 

April 4, 2022: Josh Adams and Billy Boozer, Truth Social’s chief of technology and chief of product development, leave the company after less than a year. They cite software issues, poor user growth, and general company dysfunction.  

June 8, 2022: Trump, along with five others, leave TMTG’s board ahead of a slew of subpoenas issued by the SEC and a Manhattan grand jury. The news is kept quiet until made public by a Sarasota Herald-Tribune report in July. 

June 27, 2022: A Manhattan grand jury issues subpoenas to the entire DWAC board. 

July 1, 2022: TMTG receives subpoenas from both the SEC and the Manhattan grand jury for documents related to their planned merger with DWAC. 

Aug. 30, 2022: Google says Truth Social’s content moderation policies do not meet its standards to be made available on the Google Play store. Truth Social is added to the Google Play store in October after implementing stronger content moderation policies.

Nov. 3, 2022: DWAC postpones a vote to move forward with the completion of its merger with TMTG for the sixth time, after failing to amass the 65 percent of shareholder support necessary to finalize the deal. 

Nov. 19, 2022: Following his purchase of Twitter, Elon Musk reinstates Trump’s account to the platform. The next day, the former president clarified that he had no intention of returning to Twitter, and that Truth Social would remain his primary social media platform. 

March 15, 2023: The Guardian reports that federal investigators in New York are probing whether TMTG violated anti-money laundering laws after accepting $8 million of Russian oligarch-connected funding. 

July 20, 2023: The SEC announces that it has settled fraud charges against DWAC “for making material misrepresentations in forms filed with the SEC as part of DWAC’s initial public offering and proposed merger with Trump Media & Technology Group Corp.” The SEC found that “DWAC misled investors and the SEC by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition of TMTG prior to DWAC’s IPO.” DWAC agrees to pay an $18 million penalty upon closing a merger transaction.

Sep. 5, 2023: DWAC shareholders vote to extend the merger deadline by a year, days before it’s set to expire. 

Oct. 13, 2023: DWAC reveals that it has received termination notices amounting to $467 million from investors, and would refund an additional $533 million — virtually all of its $1 billion fundraising haul.

Nov. 13, 2023: Digital World Acquisition Corp. reveals that in 2022 Truth Social brought in only $1.4 million in net sales, and lost $50 million. During the first six months of 2023, the company made $2.3 million, but lost $23 million.

Feb. 16, 2024: Trump is ordered to pay $355 million in penalties resulting from a civil fraud lawsuit brought against him by the state of New York, this on top of the massive stack of legal bills already incurred by his various court cases.

Feb. 27, 2024: TMTG and DWAC sue DWAC’s former CEO Patrick Orlando and its biggest investor, Arc Capital, alleging Orlando schemed to block the merger in order to “obtain a windfall by way of extortion.”

Feb. 28, 2024: Two of TMTG’s co-founders, Andy Litinsky and Wes Moss, file a lawsuit claiming Trump and others conspired to dilute their shares of the company ahead of its expected merger with DWAC and debut on the stock market.

The Washington Post notes that the lawsuit mentions that in 2022 Trump attempted to pressure Litinsky into giving his shares to his wife Melania, and then attempted to oust Litinsky from the company when he refused.  

Feb. 29, 2024: Arc Capital files a lawsuit of its own, alleging DWAC executives tried to strip the firm of 2 million shares of the company. 

March 19, 2024: DWAC sues one of its former executives, Patrick Orlando, in an attempt to force him to vote in favor of the merger with TMTG. 

March 22, 2024: DWAC officially approves its merger with TMTG, setting up its stock market debut. 

March 26, 2024: TMTG goes public under the ticker code DJT, closing the day at a nearly $8 billion valuation. While Trump is barred from cashing out on his shares for six months, the stock valuation means Trump could ultimately secure a $3 billion financial lifeline. 

April 1, 2024: A slew of FEC filings reveal that Truth Social reported losses of $58 million in 2023, against only $4.8 million in revenue. DJT’s stock valuation plummets as a result.

April 2, 2024: Bloomberg reports that Trump sued Truth Social co-founders Litinsky and Moss in a bid to absorb their stake in the company. The lawsuit, which was filed March 24, alleges that Litinsky and Moss made a “series of reckless and wasteful decisions at a critical time” that caused “significant damage” to the company and a “decline in the stock prices of its merger.”

Litinsky and Moss were set to net 8.6 million shares of the new company. The lawsuit seeks to strip them of everything.

April 3, 2024: Michael Shvartsman and Gerald Shvartsman, two early investors in Truth Social, plead guilty to participating in an insider trading scheme that netted them more than $22 million in advance of DWAC’s merger with TMTG. 


April 3, 2024: The Guardian reports that in 2022, Truth Social was bailed out of potential bankruptcy through emergency loans provided by Anton Postolnikov, a Russian-American businessman. Postolnikov has for years been a subject of interest in a joint FBI and Department of Homeland Security (DHS) investigation into allegations of insider trading and money laundering related to the DWA/TMTG merger.

April 4, 2024: Trump tries to inspire confidence in DJT with a series of Truth Social posts. The company’s stock continues to fall.

Source link: https://www.rollingstone.com/politics/politics-news/truth-social-drama-donald-trump-lawsuits-ipo-1234999198/

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